TCS leases 630,000 sq.ft. in Chennai amid slow IT office space take-up

Bengaluru: Tata Consultancy Services Ltd (TCS) has leased around 630,000 sq.ft. of office space in Chennai's Ozone Techno Park at a monthly rent of ₹2.8 crore. 

India’s largest information technology (IT) services company leased the space in Chennai’s Navalur suburb from Platinum Holdings Pvt. Ltd for 10 years after paying a deposit of ₹25.5 crore, according to documents accessed by real estate data analytics firm Propstack. As per the lease terms, the rent will increase by 12% after every three years.

A TCS spokesperson didn't respond to an email query on the transaction. 

Office space leasing by domestic IT services companies has been slow across major Indian cities, reflecting a slowdown in the sector amid global economic and geopolitical uncertainties.

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Raja Seetharaman, co-founder, Propstack, however, said domestic IT services companies were continuing to expand.

“Despite broader economic factors and technological shifts impacting the IT sector, companies continue to commit to significant office spaces, reflecting diverse operational strategies including work from office and regional preferences,” said Seetharaman. “This transaction also indicates that while GCCs (global capability centres) continue to be the flavour, IT companies in India continue to expand.”

Last year, TCS leased over 1 million sq.ft. of office space in Hyderabad for 15 years, as per Propstack. While the registration took place in April this year, the lease had commenced on 1 October. 

However, leasing by other IT firms has been slow, with Cognizant Technology Solutions Corp. and Wipro Ltd even giving up real estate to rationalise costs.

Earlier this year, Cognizant sold about 600,000 sq.ft. of office property on Chennai’s Old Mahabalipuram Road to Bengaluru developer Bagmane Constructions for ₹612 crore.

Gross office space leasing across India touched 18 million sq.ft. in the January-March period, as per property advisory CBRE India. GCCs, or the remote operations of multinational companies in India, accounted for 45% of this office space leasing.

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